InvestSMART Group reported a modest operating loss for FY2026 alongside a 10% increase in Funds Under Management, while progressing the conditional sale of its Intelligent Investor business.
- Proposed sale of Intelligent Investor remains conditional
- FY2026 operating loss estimated at $430k
- Funds Under Management rose 10% to $753 million
- Professionally Managed Accounts grew 24% to $479 million
- Subscription income up 2% despite subscriber decline
Conditional Sale of Intelligent Investor Advances
InvestSMART Group Limited (ASX:INV) is moving forward with the proposed sale of its Intelligent Investor business to Teaminvest Private Group Limited (ASX:TIP), a transaction first announced in May 2026. The deal, which includes the Intelligent Investor website and management rights to four ETFs, has cleared a significant hurdle with the ASX confirming it will not require InvestSMART to reapply for listing under chapters 1 and 2 of the Listing Rules. However, the sale remains subject to several conditions and is not guaranteed to complete.
Financial Performance Reflects Transition Challenges
For the year ended 30 June 2026, InvestSMART reported a slight 2% decline in total operating income to $9.82 million, weighed down by a collapse in performance fees from $669,492 in FY2025 to just $2,446 in FY2026. Subscription income nudged 2% higher to $4.62 million, buoyed by an increase in average revenue per user (ARPU) to $686, though total subscribers fell to 6,742 from 7,561 the previous year. Insurance commissions fell 10%, reflecting an expected attrition trend. The company expects an operating loss of approximately $430,000 for the full year, a notable setback for a business focused on growth.
Funds Under Management Climb on PMA Growth
Despite income pressures, InvestSMART’s Funds Under Management (FUM) rose 10% to $753 million at 30 June 2026, driven primarily by a 24% surge in the Professionally Managed Accounts (PMA) platform to $479 million. The PMA platform, launched in 2018, offers portfolios of exchange traded funds tailored to investor goals, balancing cost efficiency and diversification. In contrast, Intelligent Investor’s ASX-listed ETFs saw FUM decline to $273 million, impacted by market sell-offs in early 2026 and large taxable income distributions at year-end.
Subscription and Insurance Income Trends
Subscription revenue growth was modest but offset by a shrinking subscriber base, raising questions about retention despite improved ARPU. Insurance commissions continued their downward trajectory with a 10% decline, consistent with an expected annual attrition rate around 8%. These trends highlight challenges in sustaining recurring revenue streams amid shifting customer dynamics.
Corporate Moves and Capital Management
InvestSMART announced a new on-market share buyback following the expiry of its previous program, signaling ongoing capital management efforts. Additionally, the company appointed Belinda Barnes as Company Secretary, succeeding Catherine Teo. The audited financial report for FY2026 is scheduled for release on 19 August 2026, providing a fuller picture of the company’s financial health.
Strategic Focus Post-Intelligent Investor Sale
Managing Director Ron Hodge indicated that the sale of Intelligent Investor is intended to sharpen InvestSMART’s focus on its digital wealth advice platform, particularly the PMA business bolstered by financial advisers. This pivot aims to leverage the company’s technology-driven investment solutions and expand its footprint in Australia’s digital wealth management sector.
Bottom Line?
InvestSMART faces a pivotal year balancing the conditional Intelligent Investor sale with efforts to grow its core PMA platform amid modest financial headwinds.
Questions in the middle?
- Will the Intelligent Investor sale complete, and on what timeline?
- How will declining subscriber numbers impact subscription revenue sustainability?
- Can InvestSMART translate PMA growth into improved profitability in FY2027?